ACIT (EXEMPTION) - 1(1), MUMBAI V. GOREGAON SPORTS CLUB, MUMBAI

ITA 2139/MUM/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 0097 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 01-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VIDHYADHAR
• Keywords: Business income; Charitable institution
• Section: 143(3); 12A; 10B; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI AMARJIT SINGH , JM ITA NO. 2139 / MUM/20 16 ( ASSESSMENT YEAR : 2011 - 12 ) ACIT (EXEMPTION) - 1(1) 506, 5 TH FLOOR PIRAMAL CHAMBERS LALBAUG, MUMBAI 400 012 VS. GOREG AON SPORTS CLUB CHINCHOLI BUNDER, LINKING ROAD, OPP. SWAGAT PARK MALAD (WEST), MUMBAI 400 064 PAN/GIR NO. AAAAJ0028Q APPELLANT ) .. RESPONDENT ) REVENUE BY SHRI V.VIDHYADHAR ASSESSEE BY SHRI HARESH P. SHAH DATE OF HEARING 03 / 01 /201 8 DATE OF PRONOUNCEME NT 06 / 03 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - 1, MUMBAI DATED 06/01/2016 FOR A.Y.2011 - 12 IN THE MATTER OF ORDER PASSED U/S.143(3) OF T HE IT ACT. 2. THE ONLY GRIEVANCE OF REVENUE RELATES TO CIT(A) HOLDING THAT ASSESSEE PERFORMS A CHARITABLE PURPOSES WITHIN THE MEANING OF PROVISO TO SECTION 2(15) OF THE INCOME TAX ACT, 1961. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 4. BRIEF LY, THE FACTS OF THE CASE AS PER ASSESSMENT ORDER ARE THAT THE ASSESSEE IS A TRUST REGISTERED WITH DIT (E), MUMBAI U/S. 12A AND WITH CHARITY COMMISSIONER, MUMBAI. THE ASSESSEE FILED ITS RETURN OF INCOME ITA NO. 2139/MUM/2016 GOREGAON SPORTS CLUB 2 ON 29.09.2011 ALONG WITH THE INCOME & EXPENDITURE A CCOUNT, BALANCE SHEET AND AUDIT REPORT IN FORM 10B DECLARING TOTAL INCOME AT RS. NIL. HOWEVER, THE A.O COMPLETED THE ASSESSMENT VIDE ORDER DATED 24 . 03.2014 U/S. 143(3) OF THE I.T. ACT, 1961 AT TA XABLE INCOME OF RS. 4,02,14,370/ - .AFTER OBSERVING THAT ACTIVI TIES OF ASSESSEE WERE ORGANIZED IN REGULAR ACTIVITIES, THEREFORE, ASSESSEE IS NOT ELIGIBLE FOR EXEMPTION U/S.11 WITHIN THE MEANING OF SECTION 2(15) OF THE IT ACT. THE ASSESSEE WAS FURTHER REQUIRED TO SHOW CAUSE AS TO WHY THE INCOME FROM OPERATION, INTERES T AND DEPOSIT FROM DECORATORS SHOULD NOT BE TREATED AS BUSINESS INCOME U/S 2(15) OF T HE IT ACT AND EXEMPTION U/S 11 O F THE IT ACT BE DENIED AS THE ASSESSEE IS HAVING BUSINESS ACTIVITY. THE ASSESSEE WAS ALSO ASKED TO EXPLAIN AS TO WHY THE INTEREST INCOME SH OULD NOT BE TREATED AS TAXABLE UNDER THE PRINCIPLE OF MUTUALITY RELYING UPON THE HON'BLE APEX COURT IN THE CASE OF BANGALORE CLUB VS. CIT & ANR. BEING CIVIL APPEAL NO.124 OF 2007 DATED 14.01.2013. THE ASSESSEE WAS ALSO REQUIRED TO SUBSTANTIATE OR PROVE THA T THE INCOME RECEIVED ON ACCOUNT OF OPERATIONS OF RS.6,46,29,126 / - AND INCOME FROM OTHER SOURCES OF RS. 21,22,360 / - WAS RECEIVED FROM MEMBERS ONLY AND NOT FROM NON - MEMBERS. 5. AFTER CONSIDERING ASSESSEES CONTENTION, THE AO HELD THAT THE ACTIVITIES CARRI ED ON BY THE ASSESSEE TRUST, SHOULD BE TREATED AS BUSINESS / PROFESSION INCOME. 6. BY THE IMPUGNED ORDER, CIT(A) ALLOWED ASSESSEES CLAIM AFTER OBSERVING AS UNDER: - ITA NO. 2139/MUM/2016 GOREGAON SPORTS CLUB 3 5.2. I HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE, GONE THROUGH THE ASSESSMEN T ORDER OF THE A.O AND THE SUBMISSIONS OF THE APPELLANT AND ALSO DISCUSSED THE CASE WITH THE AR OF THE APPELLANT. THE CONTENTIONS AND SUBMISSIONS OF THE APPELLANT ARE BEING DISCUSSED AND DECIDED HERE IN UNDER: I. THE APPELLANT HAS CONTESTED THE DENIAL OF EXEMPTION U/S. 11 IN GROUND NO. 1 OF APPEAL. THE A.O IN PARAGRAPH 8 OF HIS ORDER HAS REPRODUCED AND PLACED RELIANCE ON THE OBSERVATIONS OF HIS PREDECESSOR CONTAINED IN THE ASSESSMENT ORDER FOR ASSESSMENT YEARS 2009 - 10 AND 2010 - 11. FURTHER IN PARAGRAPH 9 OF HIS ORDER THE A.O RELYING UPON THE SAME HAS HELD THE ACTIVITIES OF ASSESSEE TRUST AS BUSINESS AND COMPLETED THE ASSESSMENT ON THE SAME LINES AS THAT OF THE LAST YEARS WHICH HAS BEEN SPECIFICALLY MENTIONED. THUS AS MENTIONED BY THE AO THERE IS NO CHANGE IN FACTS IN THE YEAR UNDER CONSIDERATION AS COMPARED TO ASSESSMENT YEAR 2009 - 10 AND 2010 - 11. THE APPELLANT HAS PLACED RELIANCE ON THE ORDERS OF CIT(A) AND HON. ITAT FOR THESE YEARS. IN ASSESSMENT YEAR 2009 - 10 THE THEN CIT(A) VIDE ORDER DATED 25.3.2 013 HAS DECIDED THE SAME ISSUE OBSERVING AS UNDER : - '8. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, SUBMISSIONS OF THE APPELLANT AND THE ASSESSMENT ORDER. I FIND THAT THE NATURE OF ACTIVITIES OF THE APPELLANT TRUST ARE THE SAME AS CARRIED OUT FROM YEAR TO YEAR. I ALSO FIND THAT THE ASSESSING OFFICER - HAS NOT BROUGHT OUT ANY MATERIAL ON RECORD CONTRARY TO THE CLAIM OF EXEMPTION U/S 11. IT IS OBSERVED THAT ON IDENTICAL FACTS HON. HIGH COURT OF MUMBAI IN 21 TAXMANN.COM 479 (BOM) FOR A.Y. 2003 - 04 IN APPELLANT'S OWN CASE HELD THAT THE ASSESSEE IS A CHARITABLE INSTITUTION ENTITLED TO EXEMPTION U/S 11. SIMILARLY, THE HON. ITAT RIGHT FROM A.Y. 1998 - 99 TO A.Y. 2006 - 07 HAVE ALSO DECIDED IN FAVOUR OF THE APPELLANT. ALSO MY PREDECESSOR HELD THAT THE ASSES SEE IS ENTITLED TO EXEMPTION U/S 11 OF THE ACT. RESPECTFULLY RELYING ON THE ORDER OF HON. HIGH COURT AND ORDERS OF HONORABLE TRIBUNAL IN THE CASE OF APPELLANT THE APPELLANT IS ENTITLED TO EXEMPTION UNDER SECTION 11 OF THE INCOME TAX ACT. THEREFORE GROUND NO. 1 IS ALLOWED.' THE ABOVE FINDINGS OF THE CIT(A) WERE UPHELD BY HON. ITAT VIDE ORDER DATED 2.3.2015 OBSERVING AS UNDER : - '5. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE RELEVANT DECISION OF THE TRIBUNAL IN ITA NO. 66 21/M/12 FOR A.Y. 2008 - 09. WE FIND FORCE IN THE CONTENTION OF THE LD, COUNSEL. THE ISSUES INVOLVED IN THE YEAR UNDER CONSIDERATION WERE A/SO THERE BEFORE THE TRIBUNAL IN A.Y. 2008 - 09. WE FIND THAT THE TRIBUNAL HAS FOLLOWED THE ORDER OF THE HON'BLE JU RISDICTIONAL HIGH COURT IN ASSESSEE'S OWN CASE FOR THE ASSESSMENT YEAR 2003 - 04 VIDE ORDER DT. 14.2.2012 AND ITA NO. 2139/MUM/2016 GOREGAON SPORTS CLUB 4 FINALLY CONCLUDED THAT THE ASSESSEE'S CLAIM THAT IT IS ENTITLED FOR EXEMPTION U/S. 11 HAS BEEN UPHELD FROM THE STAGE OF HIGH COURT, 6. NOW THAT IT H AS BEEN HELD THAT THE ASSESSES IS A CHARITABLE INSTITUTION AND DULY RECOGNIZED U/S. 12A THEREFORE, THE INCOME HAS TO BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SEC. 11 OF THE ACT, RESPECTFULLY FOLLOWING THE EARLIER YEARS ORDER, WE DIRECT THE AO TO CO MPUTE THE TOTAL INCOME OF THE ASSESSEE IN TERMS OF SEC. 11 TO 13 OF THE ACT. THIS GROUND OF THE REVENUE IS DISMISSED.' FURTHER IN A.Y.2010 - 11 THE CIT(A) VIDE ORDER DATED 13.02.2015 HAS AGAIN DECIDED THE SAME ISSUE OBSERVING AS UNDER '6. I HAVE CAREFUL LY CONSIDERED THE FACTS OF THE CASE, THE SUBMISSIONS OF THE APPELLANT AND THE ASSESSMENT ORDER PASSED BY THE AO. I FIND THAT THE NATURE OF ACTIVITIES OF THE APPELLANT TRUST ARE THE SAME AS CARRIED OUT FRO M YEAR TO YEAR. I ALSO FIND TH AT THE ASSESSING O FFICER HAS NOT BROUGHT OUT ANY MATERIAL ON RECORD WHICH WOULD DISTINGUISH THE ACTIVITIES OF THE APPELLANT IN THE CURRENT YEAR FROM EARLIER YEARS. IT IS OBSERVED THAT ON IDENTICAL FACTS, HON'BLE BOMBAY HIGH CO URT [IN 21 TAXMANN.COM 479(BOM) FOR A.Y. 2003 - 04 IN APPELLANT'S OWN CASE HAS HELD THAT THE APPELLANT IS A CHARITABLE INSTITUTION ENTITLED FOR EXEMPTION UNDER SECTION 11 OF THE ACT. SIMILARLY, HON'BLE ITAT RIGHT FROM A.Y, 1998 - 99 TO A.Y. 2009 - 10 HAS DECIDED THIS ISSUE IN FAVOUR OF T HE APPELLANT. HENCE , RESPECTFULLY RELYING ON THE ORDER OF THE HON'BLE BOMBAY HIGH COURT AND ORDERS OF HON'BLE TRIBUNAL IN THE CASE OF THE APPELLANT, I HOLD THAT THE APPELLANT IS ENTITLED TO EXEMPTION UNDER SECTION 11 OF THE ACT. THE AO IS DIRECTED A CCORDINGLY TO GRANT EXEMPTION UNDER SECTION 11 OF THE ACT,' THIS ORDER OF CIT(A) HAS ALSO BEEN UPHELD BY HON ITAT VIDE ORDER DATED 23.09.2015. AS THERE IS NO CHANGE IN FACTS, OBSERVATIONS OF THE ASSESSING OFFICER IN THE YEAR UNDER CONSIDERATION, AND THE SUBMISSIONS MADE AS COMPARED TO THE PRECEDING YEARS, ASSESSING OFFICER IS DIRECTED TO FOLLOW THE FINDINGS OF MY LD. PREDECESSOR AS WELL AS HON. ITAT AS ABOVE FOR THIS YEAR ALSO. II. GROUND NO.1 OF APPEAL IS THEREFORE ALLOWED. 7. LEARNED AR PLACED ON REC ORD THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.Y.2010 - 11 DATED 23/09/2015, WHEREIN SIMILAR CLAIM OF ASSESSEE WAS ALLOWED BY DISMISSING THE REVENUES APPEAL. RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE DO NOT FIND ITA NO. 2139/MUM/2016 GOREGAON SPORTS CLUB 5 ANY INFIRMITY IN THE ORDER OF CIT(A) FOR ALLOWING ASSESSEES CLAIM OF EXEMPTION U/S. 11 R.W.S. 2(15) OF IT ACT. 8. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 06 / 03 /201 8 S D/ - ( AMARJIT S INGH ) S D/ - ( R.C.SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 06 / 03 /201 8 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), M UMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//